MORE than a third of the 86 retail tenants at Shaw Centre have moved out after their rents almost doubled.
About 31 units stand empty over five levels of shops and restaurants - the first five floors of the 25 storey office block on Orchard Road.
The sharp rise in rent has caught out fashion boutique Hawaiiana, which is bailing out at the end of the month after more than 20 years at Shaw Centre.
Its rent doubled when it renewed its lease last April and owner Nah Hoei Ling said it could not afford to stay.
Shaw Centre, which houses a variety of retail tenants - including jewellers, opticians, fashion boutiques, restaurants, spas and tailors - is owned by the Shaw Foundation. It distributes the rental revenue among charities.
The rent increases began as early as last April, but tenants said the exodus picked up speed around the end of last year when many had to renew leases.
Those that decided to stay are now paying rates ranging from $12 to $15 per sq ft (psf), compared with $6 to over $7 psf in the past.
The rent increases have come at a difficult time, with some businesses in the centre seeing sales fall as much as 40 per cent amid the economic downturn.
Departing tenants have settled in nearby malls such as Lucky Plaza and Far East Plaza, while one plans to set up shop in the upcoming Orchard Central.
It appears the building's management has moderated some rent increases.
Optician Optic Point moved to a third floor unit after its 16th floor office rent nearly tripled. It is now paying 'below $11 psf', said a spokesman, but it has had to reduce its working space from 1,000 to 500 sq ft.
Shaw Centre management declined to comment on whether the rent moderations were brought on by the exodus of tenants. They also declined to give a reason for the initial increases.
Singapore Retailers Association executive director Lau Chuen Wei said tenants voting with their feet could be a sign of things to come if landlords do not moderate rent increases.
'Prevention is better than cure. We hope landlords can work together with tenants to ensure a positive future for both parties,' said Mr Lau.
The association has met landlords to ask them to lower rents by 20 per cent to 30 per cent since last month.Source: Straits Times, 12 Mar 2009
Post a Comment